Numbers are wonderful, and budget numbers seem almost magical. Just as the "miracle of compound interest" should be taught to all teenagers (liberally quoting from the experience of Benjamin Franklin), what might be called the "nightmare of falling revenue" should be taught to all office-holders.
Republicans know that you won't get prosperity by raising taxes in a recession, but some seem to think you can get there through budget cuts alone. This country needs drastic reductions in spending, such as the plan advanced by Rep. Paul Ryan. But the sad reality is that budget cuts are therapeutic only to the point that a crashing economy doesn't force expenses on you (such as unemployment) that cannot be significantly reduced. If a rising tide raises all boats, a record low tide leaves everybody stranded.
Just as you can't spend your way to prosperity, or cut your way there, lower taxes alone also won't assure growth. However, what the supply siders say is that economic growth must be your object for any policy. "Dynamic scoring" of an economy is required when considering taxes, spending, regulation and all other policies. Do changes cause the economy to grow or shrink? How do real people respond to incentives and disincentives?
What need to hear now are a coordinated plan that combines spending cuts and tax cuts, ditches Obmacare and curbs jobs-killing regulations.
As bad as our economy is, a four percent growth rate sustained over several years can still put things right. Bret Swanson describes the process in an article in Forbes, A boom like the 60s, the 80s or the 90s would give us another four trillion dollars in revenue in 2020.
But the relentless emphasis, as Swanson says, must be placed on growth. Consider every tax, regulation and policy--from telecom spectrum to energy to health care to immigration--on its ability to help the economy grow.
Right now, people hear about nothing but pain: demands for cutbacks (Republicans) and criticism of cutbacks (Democrats). This is a dead end. The cutbacks themselves should conduce to growth, and should be part of a larger--and more important--growth strategy. Growth means jobs, profits, savings, investments and affordable retirements.
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